Schneider v Warrnambool City Council

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

EMPLOYMENT AND INDUSTRIAL LIST

S ECI 2020 03611

PETER SCHNEIDER	Plaintiff
v
WARRNAMBOOL CITY COUNCIL	Defendant

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JUDGE:	McDonald J
WHERE HELD:	Melbourne
DATE OF HEARING:	23–25 March 2021
DATE OF JUDGMENT:	11 June 2021
CASE MAY BE CITED AS:	Schneider v Warrnambool City Council
MEDIUM NEUTRAL CITATION:	[2021] VSC 337

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CONTRACT — Chief Executive Officer (‘CEO’) appointed pursuant to s 94 Local Government Act 1989 and required to perform prescribed statutory functions — CEO appointed to an office within the meaning of s 41(1) Interpretation of Legislation Act 1984 — Power of appointment included power of termination — Exercise of power of termination subject to compliance with the rules of natural justice — CEO employed pursuant to contract — Contract subject to legislation affecting the Council — Council purported to exercise contractual right to terminate CEO’s appointment and employment for ‘no reason’ — ‘No reason’ ground of termination invalid by reason of inconsistency with statutory requirement to accord CEO natural justice.

ADMINISTRATIVE LAW — Exercise of statutory power of termination subject to compliance with rules of natural justice — Plaintiff denied natural justice — No notice of reasons for termination — No opportunity to respond to allegations of poor performance — Decision to terminate affected by bias by reason of pre-judgment — Decision to terminate invalid and of no legal effect — Certiorari available to quash purported termination of plaintiff’s appointment as CEO — Plaintiff entitled to declaration that termination of his appointment and employment as CEO was made in breach of the rules of natural justice — Plaintiff entitled to resume appointment and employment as CEO forthwith.

Local Government Act 1989 ss 3, 3C, 3F, 5(2), 22(1), 62A, 63(2), 65, 79(2), 80A, 81(9), (10), (12), (13A), 81Y, 93A(6), 94, 94A, 94C, 94D, 95AA, 95A, 97A, 104, 106, 108, 109 — Local Government Act 2020 ss 10, 14 — Interpretation of Legislation Act 1984 ss 41(1), (2) — Public Administration Act 2004 s 8 — Local Government (Miscellaneous Amendments) Act 1993 ss 4(2), 7, 8, 9, 10, 11 — Supreme Court (General Civil Procedure) Rules 2015 Order 56 — Acts Interpretation Act 1901 (Cth) s 33(4) — Acts Interpretation Act 1915 (SA) s 36(a) — Acts Interpretation Act 1954 (Qld) ss 24AA, 25 — Interpretation Act 1987 (NSW) s 47(1)(b) — Local Government Act 1993 (NSW) ss 334, 336(2), 338(5), (6), 672, 673, 674.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Grace QC with Mr C Dawlings	Holding Redlich
For the Defendant	Mr R Appudurai	Russell Kennedy

HIS HONOUR:

Introduction

Pursuant to s 94 of the Local Government Act 1989 (‘LGA’)[1] each council in Victoria must appoint a natural person to be its Chief Executive Officer (‘CEO’). The LGA prescribes functions the CEO is required to undertake. The Act also stipulates that the CEO must be employed pursuant to a contract. Save for the specification of performance criteria for annual performance review and the fixing of an expiry date not more than five years post the contract’s commencement, the LGA does not prescribe the terms to be included in the contract.
[1]Unless stated to the contrary, all references to the LGA are to authorised version no 150 incorporating amendments to 30 October 2018.

On 13 July 2020 the defendant (‘WCC’) terminated Mr Peter Schneider’s appointment and employment as CEO in purported reliance on cl 14.1 of his contract of employment. Clause 14.1 conferred on WCC a right of termination for no reason, subject to payment of 12 months of Mr Schneider’s remuneration package in lieu of notice. Mr Schneider challenges the validity of this decision. He contends that the power of appointment as CEO under s 94 LGA includes the power to terminate the appointment. He contends that when WCC terminated his appointment on 13 July 2020 it exercised this statutory power which was subject to a requirement that he be afforded natural justice. He contends that he was denied procedural fairness and that the decision was affected by bias by reason of prejudgement. Mr Schneider seeks an order in the nature of certiorari pursuant to Order 56 of the Supreme Court (General Civil Procedure) Rules 2015 quashing the decision to terminate his appointment and employment. He also seeks declaratory relief, including a declaration that WCC breached the rules of natural justice when it terminated his appointment and employment as CEO.

WCC submits that although required by s 95A of the LGA to enter into a contract with Mr Schneider, the termination of Mr Schneider’s appointment and employment was governed solely by the terms of the contract. WCC submits that in exercising a contractual right of termination it was not subject to any requirement to comply with rules of natural justice. WCC submits that as the termination of Mr Schneider’s appointment and employment was governed solely by the terms of his contract of employment, the Court has no jurisdiction to grant relief under Order 56. In the alternative, WCC submits that Mr Schneider was not denied natural justice. In the further alternative, WCC submits that the Court should refrain from granting any relief to Mr Schneider on discretionary grounds.

I reject WCC’s contention that the termination of Mr Schneider’s appointment and employment as CEO was governed solely by his contract with the Council. WCC was required by s 94 LGA to appoint a CEO. A person appointed as CEO is required to undertake functions prescribed by the LGA. The position of CEO is an ‘office’ within the meaning of s 41(1) of the Interpretation of Legislation Act 1984 (‘ILA’). When construed in light of s 41(1) ILA the power of appointment under s 94 LGA includes a power to terminate the appointment.

Clause 6.2 of the contract required cl 14.1 to be read subject to any legislation affecting WCC so as not to exceed the power of WCC. WCC’s power to appoint a CEO pursuant to s 94 included a power to terminate the appointment. The power to terminate the appointment was required to be exercised in accordance with the principles of natural justice. As cl 14.1 confers a right on WCC to terminate the appointment and employment of Mr Schneider for no reason, it is inconsistent with the obligation to afford a CEO natural justice when exercising a statutory power of termination under s 94 LGA. Clause 14.1 must be read down to exclude the ‘for no reason’ ground of termination. WCC did not have a contractual right to terminate Mr Schneider’s appointment for no reason. When WCC terminated Mr Schneider’s appointment as CEO it exercised the power conferred by s 94.

The exercise of the statutory power of termination was invalid and of no legal effect because the termination decision was affected by a denial of natural justice. Mr Schneider is entitled to a declaration to that effect and to an order quashing the decision of 13 July 2020 purporting to terminate his appointment. There are no discretionary considerations which justify the withholding of that relief. Mr Schneider is entitled to immediately resume his position as CEO of WCC. The resumption of that appointment is subject to the requirement under s 94 LGA that he be employed pursuant to a contract. The contract Mr Schneider entered into which commenced on 11 February 2019 is still on foot, as Mr Schneider never accepted WCC’s repudiation of the contract.

Background

In September 2018 Mr Schneider responded to an advertisement for the position of CEO of WCC. He participated in two interviews. Thereafter, on 26 October 2018 WCC unanimously passed the following resolution:

1.That Council, pursuant to Sections 94, 94A and 95A of the Local Government Act 1989 (‘the Act’) appoint Mr Peter Schneider to the position of Chief Executive for a 4 year term, commencing mid January 2019.
2.That, subject to written acceptance of Council’s offer of appointment, Council execute the employment agreement pursuant to Sections 94A and 95A of the Act.[2]

[2]Exhibit D-8, [1]–[2].

In late October 2018 Mr Schneider was sent a contract of employment. He signed the final page of the contract and sent it back to WCC on 1 November 2018.[3]
[3]Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, [3].

Mr Schneider commenced employment with WCC on 11 February 2019. Under cl 2 of the contract, the contract expires on 10 February 2023 unless terminated earlier in accordance with its terms.

Throughout the period of his employment WCC consisted of seven Councillors, one of whom, Tony Herbert, was Mayor. The other six Councillors were Kylie Gaston, Sue Cassidy, Robert Anderson, Michael Neoh, David Owen and Peter Sycopoulis.[4] By February 2020 Councillors Owen, Neoh, Gaston and Cassidy were dissatisfied with Mr Schneider’s performance as CEO.[5] Between 12 June and 28 June 2020 Councillor Neoh, acting on behalf of Councillors Gaston, Cassidy and Owen sought and received legal advice in relation to the termination of Mr Schneider’s employment.[6] The legal advice was contained in emails to Mr Neoh from Maddocks between 12 June 2020 and 28 June 2020.[7] No resolution had been passed by WCC to obtain the advice which was provided to Mr Neoh by Maddocks.[8] Councillors Herbert, Anderson and Sycopoulis were not provided with a copy of the advice.
[4]Ibid [5].
[5]Exhibit PS-17 to the Affidavit of Peter Bernard Schneider, affirmed 15 September 2020.
[6]Affidavit of Michael Kein Lam Neoh, sworn 2 November 2020, [21].
[7]Exhibit MKLN-4 to the Affidavit of Michael Kein Lam Neoh, sworn 2 November 2020.
[8]Affidavit of Tony George Herbert, sworn 5 October 2020, [31].

On 28 June 2020 Councillor Gaston gave notice of a motion that:

Council hold a Special Meeting on Monday 13 July 2020 at 5.45pm, at the Reception Room, Warrnambool Civic Centre, 25 Liebig Street, Warrnambool, to consider a confidential matter relating to the extent of Council’s contractual powers to terminate the CEO’s Contract of Employment and employment as Council’s CEO.[9]

[9]Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, [23].

On 9 July 2020 an agenda paper prepared by a member of Council staff was circulated to Councillors. Mr Schneider received the agenda paper on 13 July 2020. Following receipt of the agenda paper, Mr Schneider sent an email to the Mayor, Mr Herbert, in the following terms:

Dear Mayor Herbert,
I refer to the Notice of Motion to be tabled at this evening’s Special Council Meeting (13 July 2020) to consider a confidential matter relating to the extent of the Council’s contractual powers to terminate my contract as CEO.
If the ‘matter’ is to consider whether to terminate my employment, before the Council resolves to terminate, I would be grateful to receive written details of the issues which have prompted the termination to be considered and to be allowed a reasonable period to respond to the issues.
I respectfully contend the Council must act reasonably and in good faith in exercising its rights under my contract, which justifies my request. Furthermore, Council should not act arbitrarily and capriciously.
But more importantly, I very much want to continue as the CEO to enable and assist the Warrnambool City Council to ameliorate the health consequences of Covid-19, rebuild the local economy, see through our major current and future projects and much more.
These are not easy times.[10]

[10]Ibid [24]; Exhibit PS-13 to the Affidavit of Peter Bernard Schneider, affirmed 15 September 2020.

At the commencement of the Special Meeting on 13 July 2020 Mr Schneider excused himself on the basis that he had an interest in the matter. There was no discussion during the meeting regarding the reasons why Councillors Gaston, Neoh, Cassidy or Owen wished to terminate Mr Schneider’s employment.[11] Councillors Gaston, Neoh, Cassidy and Owen each gave evidence that their failure to discuss the reasons was based on legal advice they had received from Maddocks that they should avoid discussing Mr Schneider’s work performance.[12]
[11]Affidavit of Tony George Herbert, sworn 5 October 2020, [35].
[12]Affidavit of David James Owen, affirmed 30 October 2020, [31]; Affidavit of Michael Kein Lam Neoh, sworn 2 November 2020, [38]; Affidavit of Susan Elizabeth Cassidy, sworn 2 November 2020, [16(b)]; Affidavit of Kylie Ann Gaston, affirmed 2 November 2020, [15(b)].

Prior to the meeting, Councillor Herbert, with input from Councillors Anderson and Sycopoulis, had prepared a list of 31 questions relevant to the potential termination of Mr Schneider’s employment.[13] During the meeting Councillors Gaston, Neoh, Cassidy and Owen did not respond to any of these questions.[14] A motion to terminate Mr Schneider’s employment was carried by Councillors Gaston, Neoh, Cassidy and Owen. The motion was in the following terms:
[13]Exhibit TH-8 to the Affidavit of Tony George Herbert, sworn 5 October 2020.
[14]Ibid [35].

(a) to terminate the employment of the Chief Executive Officer, Mr Peter Schneider, effective immediately under the ‘for no reason’ provision in clause 14 of the Chief Executive Officer’s contract of employment;

(b) that in accordance with cl 14 of the Chief Executive Officer’s Contract of Employment, pay to the Chief Executive Officer the equivalent of 12 months total gross remuneration package and all accrued entitlements;

(c) to authorise the Mayor to immediately notify the Chief Executive Officer of the employment termination and take such steps and execute such documents as are necessary to give effect to the resolution; and

(d) that Part 1(a) and 1(c) of the Resolution ceases to be confidential when the Mayor sends an email to all Councillors confirming that the Chief Executive Officer has been informed of its effect.[15]

[15]Exhibit TH-9 to the Affidavit of Tony George Herbert, sworn 5 October 2020.

At 7.15pm on 13 July 2020 Mr Herbert informed Mr Schneider that his employment had been terminated.[16] On 20 July 2020 $201,769.30 was deposited into Mr Schneider’s bank account.[17]
[16]Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, [27].
[17]Ibid [31]; Exhibit VAK-1 to the Affidavit of Vikki Ann King, affirmed 30 October 2020.

Mr Schneider’s contract of employment

The contract includes a section entitled ‘Background’, as follows:

A.The Council wishes to appoint and employ the Officer as its Chief Executive Officer for a maximum term in accordance with the Act.
B.The Officer wishes to accept this appointment and employment for that maximum term, in accordance with this Agreement.
C.The parties acknowledge that the appointment is made in accordance with the Act.
D.The parties acknowledge and agree that the Officer has been appointed on the basis of merit.
E.The parties intend this Agreement to take effect as a contract for the purposes of the Act.

The ‘Act’ is defined in cl 1 as the Local Government Act 1989 (Vic) or any successor legislation.

Clause 5.1 is headed ‘Officer’s responsibilities’. Clause 5.1.3 provides that the Officer must ‘discharge the responsibilities and perform the functions required of the Officer under s 94A of the Act’. Clause 5.1.9 provides that the Officer must ‘at all times comply with the provisions of the Act and any other legislation applying to matters within the scope of the Officer’s employment’.

Clause 6.1 is entitled ‘Statutory duties not limited’. It provides:

Clause 5 will not be construed as limiting the exercise by the Officer of the Officer’s statutory duties, functions or powers as Chief Executive Officer under the Act or any other relevant legislation, including the Officer’s powers and responsibilities under s 94A of the Act.

Clause 6.2 is entitled ‘Subject to legislation’. It provides:

This Agreement will be read subject to any legislation affecting the Council so as not to exceed the power of the Council. Where any clause of this Agreement would, but for this sub-clause, have been construed as exceeding the Council’s powers, both the Agreement and the clause are valid to the extent to which they are not in excess of that power.

Clause 14 is headed ‘Termination by Council’. Clause 14.1 provides:

Notwithstanding any other clause in this Agreement, the Council may terminate this Agreement and the Officer’s appointment and employment immediately for any reason or no reason provided that the Council pays the Officer the lesser of:
14.1.1 twelve months Remuneration Package in lieu of notice; or
14.1.2the remaining value of the Remuneration Package which would have been paid had the Officer continued in employment until the end of the Term.

Clause 17 is headed ‘Redundancy during Term’. Clause 17.1 provides:

The Council may terminate the employment of the Officer during the Term on the ground of redundancy where the Council no longer requires the Officer’s job to be performed by anyone.

Clause 18 is headed ‘Termination of Employment on Expiry Date’. Clause 18.1 provides:

The Officer acknowledges that the Officer’s appointment, and the employment relationship between the Officer and the Council, will terminate on the Expiry Date unless the Officer has been reappointed under a new contract under clause 4.

Clause 24.5 is headed ‘Severance’. Clause 24.5.1 provides:

If a provision in this Agreement is held to be illegal, invalid, void, voidable or unenforceable, that provision must be read down to the extent necessary to ensure that it is not illegal, invalid, void, voidable or unenforceable.

Clause 24.5.2 provides:

If it is not possible to read down a provision as required in this clause, that provision is severable without affecting the validity or enforceability of the remaining part of that provision or the other provisions in this Agreement.

Local Government Act 1989

During the period 11 February 2019 (the commencement date of Mr Schneider’s contract of employment) and 13 July 2020 Mr Schneider’s employment was subject to both the Local Government Act 1989 and the Local Government Act 2020 (‘LGA 2020’). It is common ground that the provisions of the 1989 Act relevant to the determination of Mr Schneider’s claim continued to be in operation on 13 July 2020. Neither party placed any weight on any provision of the LGA 2020.

Part 4 Div 3 of the LGA is headed ‘Council staff’. Sections 94(1) to (4) provide:

(1)A Council must appoint a natural person to be its Chief Executive Officer.
(1A)The Council must make a permanent appointment to the position of Chief Executive Officer as soon as is reasonably practicable after a vacancy in the position occurs.
(2)The Chief Executive Officer is a member of Council staff.
(3)A Council may only appoint a person to be its Chief Executive Officer after it has invited applications for the position in a notice in a newspaper circulating generally throughout Victoria and has considered all applications received by it that comply with the conditions specified in the notice.
(4) Subsection (3) does not apply if—
(a)    in the 6 months immediately before the person’s contract as Chief Executive Officer is due to expire, the Council passes a resolution to reappoint that person as its Chief Executive Officer; and
(b)   at least 14 days before the resolution is passed, public notice was given of the intention to put the resolution; and
(c)    the public notice contained—
(i)     a statement that the passing of the resolution would result in the reappointment of the Chief Executive Officer without the position being advertised; and
(ii)   any other details required by the regulations.

Section 94A is headed ‘Functions of the Chief Executive Officer’. Section 94A(1) to (4) provides:

(1) A Chief Executive Officer is responsible for—
(a)establishing and maintaining an appropriate organisational structure for the Council; and
(b) ensuring that the decisions of the Council are implemented without undue delay; and
(c) the day to day management of the Council’s operations in accordance with the Council Plan; and
(ca) developing, adopting and disseminating a code of conduct for Council staff; and

(d) providing timely advice to the Council; and
(da) ensuring that the Council receives timely and reliable advice about its legal obligations under this Act and any other Act; and
(db) supporting the Mayor in the performance of the Mayor’s role as Mayor; and
(e) carrying out the Council’s responsibilities as a deemed employer with respect to Councillors, as deemed workers, which arise under or with respect to the Accident Compensation Act 1985 or the Workplace Injury Rehabilitation and Compensation Act 2013; and
(f) performing any other function or duty of the Chief Executive Officer specified in this Act or any other Act.

(2)The Chief Executive Officer may appoint as many members of Council staff as are required to enable the functions of the Council under this Act or any other Act to be carried out and to enable the Chief Executive Officer to carry out her or his functions.
(3)The Chief Executive Officer is responsible for appointing, directing, managing and dismissing Council staff and for all other issues that relate to Council staff.
(3A)The Chief Executive Officer is responsible for managing interactions between Council staff and Councillors including by ensuring that appropriate policies, practices and protocols are in place defining appropriate arrangements for interaction between Council staff and Councillors.
(4)A reference to Council staff in this section does not include a reference to the Chief Executive Officer.

Section 94D is headed ‘Duty of Chief Executive Officer’. It provides:

The Chief Executive Officer must give Council staff an opportunity to apply for any vacant permanent full-time Council staff position that the Chief Executive Officer intends to fill.

Section 95AA is headed ‘Code of conduct for Council Staff’. It provides:

(1)A Chief Executive Officer must develop and implement a code of conduct for Council staff.
(2)A code of conduct for Council staff must include any matters which are prescribed for the purposes of this section.
(3)The Chief Executive Officer must ensure that members of Council staff have access to the code of conduct for Council staff.

Section 95A is headed ‘Employment of senior officers to be regulated by contract’. Section 95A(1) to (6) provides:

(1) A senior officer may only be employed under a contract.
(2) The contract must—
(a) specify performance criteria for the purpose of reviews of the senior officer’s performance; and
(b)specify the date on which it expires, which must be a date that is not more than 5 years after the date on which it commences; and

(c) include any other matter that is required by the regulations.
(3)On the expiry of a senior officer’s contract, the senior officer may be invited to enter into a new contract.
(4)Any contract of employment between—
(a) a Council and a Chief Executive Officer; or
(b) a Chief Executive Officer and a senior officer—
that does not comply with subsection (2) is void.

(5)This section does not apply to work performed by a person filling a position on an acting basis for a period of not more than 12 months.
(6)For the purposes of this section, if a contract contains an option for renewal, the expiry date of the contract is the date on which the last option period ends.

‘Senior officer’ is defined in s 3 as meaning:

(a) the Chief Executive Officer;
(b)a member of Council Staff who has management responsibilities and reports directly to the Chief Executive Officer;
(c)any other member of Council staff whose total remuneration exceeds $124 000 or a higher threshold amount specified by the Minister in accordance with section 97B.

Section 97A is headed ‘Performance of senior officers to be assessed annually’. Section 97A provides:

(1)At least once each year a Council must review the performance of its Chief Executive Officer.
(2)At least once each year the Chief Executive Officer must review the performance of every other senior officer.

In addition to the functions of a CEO prescribed by s 94A the LGA prescribes other functions to be carried out by a CEO:

·section 22(1): CEO responsible for the preparation of voters’ list of rate payers;[18]
·section 62A: prescribes responsibilities of CEO in respect of election campaign donations;[19]
·section 63(2): CEO responsible for administering the oath of office to Councillors;
·section 79(2)(a)(ii) and (v): CEO responsibilities in respect of the disclosure of Councillor conflicts of interest;
·section 80A: CEO responsibility for ensuring a written record is kept in respect of an assembly of Councillors;
·section 81(9), (10), (12), (13A): CEO responsibility for maintaining a register of interests of Councillors; and
·section 81Y: Duties of CEO in relation to Councillor conduct panels.

[18]This section was repealed by the Local Government Act 2020 with effect from 6 April 2020.

[19]This section was repealed by the Local Government Act 2020 with effect from 6 April 2020.

In this judgment, the functions of a CEO set out in [28]–[30], [33] and [34] of this judgment are referred to as ‘the CEO statutory functions’.

Section 5(2)(a) LGA provides that a Council is a body corporate with perpetual succession. Section 5(2)(e) provides that a Council is capable of doing and suffering all acts and things which bodies corporate may by law do and suffer and which are necessary or expedient for performing its functions and exercising its powers.

Section 3F(1) provides:

Subject to any limitations or restrictions imposed by or under this Act or any other Act, a Council has the power to do all things necessary or convenient to be done in connection with the achievement of its objectives and the performance of its functions.

Sections 3F and 5(2) were repealed by the LGA2020 as of 6 April 2020. Section 10 of the LGA 2020 is in identical terms to s 3F. Section 14(1)(e) of the LGA 2020 is in identical terms to s 5(2)(e).

Interpretation of Legislation Act 1984

Section 41(1)(b) ILA provides:

(1)If an Act or subordinate instrument confers on a person or body (the appointer) a power to appoint a person to an office, the power, unless the contrary intention appears, includes a power—
(b)to remove a person appointed to the office …

Section 41(2) ILA provides:

The following paragraphs apply in relation to an appointment of a person (the appointee) made under subsection (1)—
(a) the appointer—
(i)may determine the terms and conditions of the appointment, including remuneration and allowances (if any);
(ii)may terminate the appointment at any time …

Issues for determination

In the course of his submissions, Mr Grace QC who appeared with Mr Dawlings for Mr Schneider, narrowed the issues which it is necessary for the Court to determine. Mr Grace did not press the contention that WCC was not authorised to convene the meeting held on 13 July 2020. Further, in so far as Mr Schneider contends that the decision of WCC was made in bad faith, Mr Grace clarified that this contention is a subset of the plaintiff’s claim that he was denied procedural fairness.

During the course of the trial both parties advanced submissions on whether cl 14.1 of the contract is invalid by reason of inconsistency with s 94C LGA. Following the conclusion of the trial, the Court of Appeal delivered judgment in Tucker v Victoria.[20] This judgment considered s 8 of the Public Administration Act 2004 which is in identical terms to s 94C LGA. The effect of the Court of Appeal’s judgment is that the WCC is not subject to any legal obligation to comply with the employment principles in s 94C. As such, there is no basis for concluding that cl 14.1 is invalid by reason of inconsistency with s 94C. It is therefore unnecessary to address the competing submissions of the parties on this issue. However, it is necessary to address Mr Grace’s submission that WCC had no power to contract out of the statutory obligation arising under s 41(1) ILA such that the power to terminate Mr Schneider’s appointment as CEO had to be exercised in accordance with the rules of natural justice.[21]
[20][2021] VSCA 120.
[21]Transcript of Proceedings, T 93 L 3–31, T 94 L 1–29 (24 March 2021).

Based on the submissions of the parties and having regard to the judgment of the Court of Appeal in Tucker v Victoria there are six issues for determination in the present proceeding:

(i) Does the power of appointment of a CEO under s 94 LGA include a power to terminate the CEO’s appointment? The resolution of this question turns upon:

(a) whether the position of CEO is an ‘office’ for the purposes of s 41(1) ILA; and

(b) if so, does the LGA disclose a contrary intention such that the power of appointment does not include a power of termination of appointment.

(ii) If the power of appointment under s 94 does include a power to terminate the appointment of the CEO, is the exercise of the power subject to a requirement to comply with the rules of natural justice?

(iii) When WCC terminated Mr Schneider’s appointment as CEO, did it exercise a statutory power of termination under s 94 LGA or a contractual right of termination under cl 14.1?

(iv) Did WCC accord natural justice to Mr Schneider when terminating his appointment?

(v) If WCC did not accord Mr Schneider natural justice, was the Council resolution of 13 July 2020 effective to terminate his appointment as CEO?

(vi) Should the Court refuse to grant relief on discretionary grounds?

Mr Schneider’s appointment as CEO was an appointment to an ‘office’ within the meaning of s 41(1) ILA

The current wording of s 41(1) ILA was inserted by the Law and Justice Legislation (Further Amendment) Act 1997. Neither party referred to any authority which has considered the meaning of ‘office’ in s 41(1) in its current form. I have not identified any relevant authority. Prior to its amendment by the 1997 Act, s 41(1) provided:

Subject to sub-section (2), where an Act or subordinate instrument confers on a person or authority a power to make an appointment to an office or position, that person or authority has, unless the contrary intention appears, the power to remove or suspend a person appointed to the office or position and to appoint another person temporarily in the place of a person so removed or suspended or in the place of a sick or absent holder of the office or position.

Graham v Environment Protection Authority[22] concerned an application to quash a decision of the Authority revoking the applicant’s appointment as an environmental auditor pursuant to s 57 of the Environment Protection Act 1970. Beach J adopted a broad interpretation of the meaning of ‘office’ in s 41(1) ILA prior to the 1997 amendment:

‘Office’ in this context can mean nothing more than a function or duty assigned to a person.[23]

Beach J concluded that the Environment Protection Authority had power to revoke a person’s appointment as an environmental auditor pursuant to s 41(1) ILA.

[22](Supreme Court of Victoria, Beach J, 27 February 1996).

[23]Ibid 11.

In Palais Parking Station Pty Ltd v Shea (‘Palais Parking’)[24] the Full Court of the South Australian Supreme Court considered the meaning of ‘office’ in s 36 of the Acts Interpretation Act 1915 (SA). Section 36(a) of the Act provided:

Words giving power to appoint to any office of place, or to appoint a deputy, shall be deemed to include power—
(a) to suspend or remove any person appointed under such power ...

Bray CJ cited with approval the statement of Harman LJ in Mitchell & Edon v Harris that ‘an office is a position or post which goes on without regard to the identity of the holder of it from time to time’.[25]

[24](1977) 16 SASR 350.

[25]Ibid 359, quoting Mitchell & Edon v Harris [1960] Ch 498, 530.

In ‘Termination of Appointments to Public Offices’[26] Professor Enid Campbell considered the operation of s 33(4) of the Acts Interpretation Act 1901 (Cth) and its state equivalents. Professor Campbell considered that the meaning attributed by Bray CJ in Palais Parking to ‘office’ equated with the meaning which has been attributed to ‘office’ in the expression ‘an office or employment of profit’ in tax legislation:[27]

An office or an employment which was a subsisting, permanent, substantive position, which had an existence independent of the person who fills it, and which is filled in succession by successive holders.[28]

[26]Enid Campbell, ‘Termination of Appointments to Public Offices’ (1996) 24 Federal Law Review 1.

[27]Ibid 6.

[28]See Great Western Railway Co v Bater (Surveyor of Taxes) [1920] 3 KB 266, 274 (Rowlatt J).

The requirement under s 95A LGA that a CEO must be employed under a contract is not incompatible with the person appointed as CEO being appointed to an office for the purposes of s 41(1) ILA. Mr Schneider was appointed to the office of CEO pursuant to s 94 LGA as well as being employed under a contract of employment pursuant to s 95A LGA. He was the holder of an office which owes its existence to the LGA as well as being an employee. The distinction between appointment to an office and employment as an employee is evident in the ‘Background’ section of Mr Schneider’s contract:

A.The Council wishes to appoint and employ the Officer as its Chief Executive Officer for a maximum term in accordance with the Act.
B.The Officer wishes to accept this appointment and employment for that maximum term, in accordance with this Agreement.
C.The parties acknowledge that the appointment is made in accordance with the Act.[29]

The distinction between appointment and employment is also evident in cl 14.1 which confers on the Council a power to terminate ‘the Officer’s appointment and employment’. The LGA establishes a statutory scheme of office holding and employment. The Act regulates both Mr Schneider’s appointment to the office of CEO and his employment as CEO under a contract of employment.[30] The exercise of a power of appointment under s 94 enlivens the obligation under s 95A for the CEO to be employed under a contract.

[29]Exhibit PS-1 to the Affidavit of Peter Bernard Schneider, affirmed 15 September 2020 (emphasis added).

[30]See Jarratt v Commissioner of Police (NSW) (2005) 224 CLR 44, 51 [10] (Gleeson CJ), 59 [45] (McHugh, Gummow and Hayne JJ) (‘Jarratt’); R v McCann (1998) 2 Qd R 56, 73.

A person appointed as CEO pursuant to s 94 LGA is appointed to an office for the purposes of s 41(1) of the ILA. Every council in Victoria must appoint a natural person to the position of CEO. The position is a permanent position which exists independently of the person who fills it from time to time.[31] A CEO is required to perform statutory functions of a public nature.[32]

Does the LGA disclose a contrary intention such that the power of appointment in s 94 does not include a power of termination?

[31]Cannon v Tahche (2002) 5 VR 317, 337–8 [51]; Great Western Railway Co v Bater [1922] 2 AC 1, 15; Sykes v Cleary (1992) 176 CLR 77, 96–7.

[32]Leerdam v Noori (2009) 255 ALR 553, 556 [16]; Macksville and District Hospital v Mayze (1987) 10 NSWLR 708, 730; R v McCann (1998) 2 Qd R 56, 74.

WCC submits that the LGA discloses a contrary intention (that the power of appointment under s 94 does not include a power of removal) because the LGA requires that a person appointed as CEO is to be appointed and employed pursuant to a contract.[33] WCC submits that although there is no provision in the LGA which deals with termination of a CEO, the Act makes provision by way of the terms of the contract between the CEO and the Council.[34] WCC submits that it is unnecessary to have recourse to the implied power of termination under s 41 ILA in circumstances where the contract which was entered into between WCC and Mr Schneider pursuant to s 95A LGA expressly governs the power to remove Mr Schneider from his position as CEO of the Council.[35]
[33]Transcript of Proceedings, T 184 L 3–31, T 185 L 1–5 (24 March 2021).
[34]Transcript of Proceedings, T 187 L 26–31, T 188 L 1–5 (24 March 2021).
[35]Transcript of Proceedings, T 214 L 26–31, T 215 L 1–5 (25 March 2021); Defendant, ‘Defendant’s Outline of Submissions’, 8 January 2021, [27].

In support of its submission that the LGA discloses a legislative intention that the power of appointment under s 94 does not include a power of removal, WCC placed considerable weight on amendments to the LGA which were introduced by the Local Government (Miscellaneous Amendments) Act 1993 (‘the 1993 Act’).

In its original form the LGA made specific provision for the removal of ‘designated officers’. The definition of ‘designated officer’ was as follows:

‘Designated officer’ means a person appointed to any of the following offices:
(a)       Municipal clerk;
(b)       Municipal engineer;
(c)       Municipal electrical engineer;
(d)      Municipal valuer;
(e)       Municipal building surveyor;
(f)       Municipal building inspector;
(g)       Municipal health surveyor.[36]

[36]Local Government Act 1989 s 3(1), as enacted.

Prior to the 1993 Act, s 100 LGA was headed ‘Protection against removal from office’. The section provided:

(1)This section applies to designated officers other than municipal building inspectors.
(2)If a Council proposes to remove a designated officer from office the Council must—
(a)give reasons in writing for its proposal; and
(b)either require the Board to hold an inquiry or suspend the designated officer pending removal.

(3)If a designated officer is suspended the officer may within 14 days of being suspended require the Board to hold an inquiry.
(4)If an inquiry is to be held in relation to a municipal health surveyor a nominee of the Chief General Manager of the Health Department must be present at the enquiry.
(5)If a designated officer who has been suspended does not require the holding of an inquiry the Council may remove the designated officer from office.
(6)The Council must give effect to the report received from the inquiry.

The reference to ‘the Board’ in s 100(2) and (3) was a reference to the Local Government Qualifications Board.

Prior to the 1993 Act s 94(3) LGA provided:

A Council may appoint as a member of Council staff a person to be the chief executive officer.

However, a person appointed as chief executive officer did not have any functions or duties prescribed by the LGA. A person appointed as Municipal Clerk was required to undertake a range of statutory functions.

Section 4(2) of the 1993 Act amended s 94(3) by stipulating that the Council must appoint as a member of Council staff a person to be its Chief Executive Officer. Section 7 of the 1993 Act inserted ss 95A and 95B: ‘Employment of senior officers to be regulated by contract’, and ‘Powers of the Minister concerning the employment of senior officers’. Section 8 repealed s 97 which required a Council to appoint designated officers. Section 9 inserted ss 97 and 97A which prescribed the functions of a CEO and required the performance of senior officers to be reviewed annually. Section 10(1) repealed s 100 which provided designated officers with protection from removal of office. Section 10(2) provided that any rights conferred on a person by s 100 as in force immediately prior to the repeal of that section were extinguished on the date s 10(2) came into operation. Section 11 abolished the Local Government Qualifications Board which had the power to hold an inquiry in respect of the removal of a designated officer under s 100.

WCC submits that as a result of the amendments and the repeals made by the 1993 Act the relationship between a Council and its CEO was a purely contractual relationship, and that any entitlement to be accorded procedural fairness was dependent upon the terms of the contract. In its written submission WCC contended:

the substantive effect of the amendments and repeals made by the 1993 Act was:
·to require that a CEO of a council must only be employed under a contract [s 95A(1)];
·save for the matters mandated under s 95A(2), to leave the content of the contract between a council and its CEO (and, for that matter, between a CEO and another senior officer) to be agreed by the parties to that contract;
·by the repeal of the former s 100, and the simultaneous stark extinguishment of any rights then conferred on, or accrued in, a senior officer by reason of that section, to implement the intention of the legislature that no such protection ought continue to be expressly available, let alone be implied, under the LGA 1989 in relation to a ‘senior officer’ such as the CEO; and
·to otherwise leave to the parties to the contract, if they so agreed, the content of any provisions with respect to the termination of the employment of that senior officer ...

The council contends, with respect, that the legislative scheme introduced by the 1993 Act rendered the relationship between a council and its CEO exactly in the terms described by Hely J in Barratt v Howard & Ors (1999) 165 ALR 605 at [11]:
·‘If the relationship between the applicant and the Executive Government was a purely contractual relationship of master and servant, then any entitlement to a fair hearing before dismissal would be dependent upon the terms of the contract. There would be no such right unless conferred by the contract, and the rights of the parties would be determined by reference to private law, rather than by reference to public law considerations’.[37]

[37]Defendant, ‘Defendant’s Outline of Submissions’, 8 January 2021, [23]–[24] (citations omitted).

The second reading speech for the Local Government (Miscellaneous Amendments) Bill 1993 was delivered by the Minister for Local Government on 28 October 1993. The Minister’s speech addressed the repeal of s 100 LGA in the following terms:

The Victorian legislation is also anomalous in offering protection to certain designated officers against removal from office. In effect, a council cannot remove one of those officers without first going through a hearing before the Local Government Qualification Board. The existence of this provision is said to have been useful in deterring a council which might otherwise have applied unfair pressure to a designated officer. Today, however, there are grievance and termination provisions in the Federal award which covers Victorian council staff and those provisions, along with breach of contract remedies, provide appropriate protection for officers. The provisions of the Act have become outmoded and the Bill will repeal them.[38]

[38]Victoria, Parliamentary Debates, Legislative Council, 28 October 1993, 813 (RM Hallam, Minister for Local Government).

The Minister’s speech does not support WCC’s submission that the repeal of s 100 discloses a legislative intention that the entitlement of senior officers to be accorded procedural fairness in respect of termination of employment was to be solely regulated by the terms of their contract with the Council. First, the Minister, when addressing the repeal of s 100 stated, ‘there are grievance and termination provisions in the Federal award which covers Victorian council staff and those provisions, along with breach of contract remedies, provide appropriate protection for officers’. Second, the Minister’s statement that ‘the provisions of the Act have become outmoded’ is a reference to the abolition of the Local Government Qualifications Board. In this respect, the Minister stated:

There was a time when occupational regulation like this served to improve educational standards in local government. However, in today’s competitive educational and employment environment that rationale no longer holds for the majority of those positions. It is essential that councils are able to employ senior staff with skills suited to councils’ needs and have the ability to do so from a pool wider than those who have particular qualifications. Moreover, it is critical that senior staff have a clear understanding of their responsibilities and are accountable for their performance.[39]

[39]Ibid.

Prior to its repeal, s 100 enshrined rights of natural justice in so far as it required a Council to give reasons in writing for any proposal to remove a designated officer from office. However, the repeal of s 100 does not, of itself, manifest a legislative intention that the termination of a senior officer would be solely governed by contractual terms.

Neither party made reference to the second reading speech in respect of the Local Government (Miscellaneous Amendments) Bill 1993. As such, neither party advanced any submissions which shed light on the Minister’s reference to ‘grievance and termination provisions in the Federal award’. It is not necessary to address the content of the grievance and termination provisions referred to by the Minister to discern whether the repeal of s 100 discloses a legislative intent that a senior officer’s entitlement to be accorded natural justice was to be regulated solely by the terms of their contract of employment. It is plain from the Minister’s second reading speech that the repeal of s 100 was, in part, justified by the existence of grievance and termination provisions in the extant Federal award, as well as the abolition of the Local Government Qualifications Board which had become obsolete.

Legislative history is a contextual matter to which regard may be had when undertaking an exercise of statutory construction. This includes consideration of repealed antecedents of a continuing provision.[40] When the legislative history of Pt 4 Div 3 LGA is properly understood, it does not support WCC’s submission.[41]
[40]R v Lavender (2005) 222 CLR 67, 79–80 [31].
[41]Cf Commissioner of theAustralian Federal Police v Courtenay Investments Ltd (No 2) (2014) 283 FLR 59, 69 [48]–[49].

Although a Council is required to have a contract with its CEO, the relationship between the CEO and the Council is not purely a contractual relationship of employer and employee. The statutory functions which a CEO is required to undertake owe their existence to the LGA, not the terms of the contract between a CEO and a Council. A CEO is required to undertake these functions irrespective of the terms of their contract. A CEO is required to undertake these functions by reason of holding the office of CEO, not by reason of being an employee of Council.

WCC submits that the LGA makes provision for the removal of a CEO from office by requiring the CEO and the Council to enter into a contract. This submission would have force if the Act stipulated that a CEO is removed from office if terminated in accordance with the terms of their contract of employment. Although s 95A mandates that a senior officer must have a contract, the LGA says nothing about the contract regulating the termination of a CEO’s appointment.

Section 95A LGA applies to senior officers. Senior officer is defined in s 3 as:

(a) the Chief Executive Officer;
(b)a member of Council Staff who has management responsibilities and reports directly to the Chief Executive Officer;
(c)any other member of Council Staff whose total remuneration exceeds $124 000 or a higher threshold amount specified by the Minister in accordance with section 97B.

The CEO is the holder of an office within the meaning of s 41(1) ILA. Save for the power of appointment of a CEO under s 94, no other senior officer is appointed pursuant to the LGA or has statutory functions prescribed by the LGA. The requirement for a Council to employ senior officers under a contract does not manifest a legislative intention that the power of appointment of a CEO under s 94 LGA does not include power to terminate the appointment of a CEO.

Further, s 93A LGA supports a finding that the legislature intended s 94 to include a power of termination. Section 93A provides that subject to that section, a Council must not make a major policy decision during the election period for a general election. Major policy decision is defined in s 93A(6)(b) to include a decision ‘to terminate the appointment of a Chief Executive Officer under section 94’ (emphasis added). Indeed, s 93A(6)(b) LGA supports a construction of s 94 such that it impliedly includes a power to remove a CEO without the need to have recourse to s 41(1) of the ILA.

Section 95A(2)(b) requires a contract between a Council and its CEO to ‘specify the date on which it expires, which must be a date that is not more than 5 years after the date on which it commences’. Sections 94(4) and 95A(2)(b) manifest a legislative intention that the end of a CEO’s period of appointment under s 94(1) coincides with the expiration of their contract of employment. However, ss 94(4) and 95A(2)(b) do not manifest an intention that the power of appointment under s 94(1) does not include a power of termination during the period of a CEO’s appointment. A fixed term contract between one and five years duration would comply with s 95A(2)(b). Such a contract would expire by the effluxion of time. This is acknowledged in cl 18.1 of Mr Schneider’s contract which provides:

The Officer acknowledges that the Officer’s appointment, and the employment relationship between the Officer and the Council, will terminate on the Expiry Date unless the Officer has been reappointed under a new contract under clause 4.

The obligation to appoint a CEO and the requirement for a Council to employ a CEO under a contract apply to every Council in Victoria. A Council, as occurred with WCC, may enter into a contract which regulates the termination of both the CEO’s appointment and employment. However, there is no statutory requirement to do so. A Council could simply enter into a fixed term contract of five years’ duration which conferred no right on either party to the contract to terminate prior to the nominated expiry date. Whether s 94 read in the light of s 41(1) ILA includes a power of termination involves a task of statutory construction. The proper construction of s 94 is not aided by consideration of the terms of Mr Schneider’s contract with WCC. The question of whether the LGA manifests an intention that the power of appointment under s 94 includes a power of termination is to be determined objectively by reference to the text and context of the LGA.

The broad discretion conferred upon a Council by s 95A might or might not result in a Council entering into a contract which regulates the termination of a CEO’s appointment. If, as contended by WCC, the requirement under s 95A LGA for a Council to enter into a contract with its CEO, manifests a contrary intention that s 94 does not include a power of termination, this could result in significant anomalies. A Council which entered into a fixed term contract silent on the right to terminate the contract prior to its expiry date, would have neither statutory nor contractual rights to terminate the CEO’s appointment prior to the nominated expiry date of the contract. On the other hand, if s 94 LGA is construed as including a statutory power to terminate the appointment of a CEO, a Council would have a statutory right to terminate the appointment notwithstanding the absence of any contractual right to do so.

The absence of detailed prescription under s 95A LGA regarding the terms of the contract which the Council is required to enter into with senior officers supports a finding that the LGA does not disclose an intention that the power of appointment under s 94 LGA does not include a power to terminate the appointment of a CEO.

In Adco Constructions Pty Ltd v Goudappel[42] Gageler J stated, in respect of the requisite contrary intention to displace s 30 of the Interpretation Act 1987 (NSW):

A contrary intention sufficient to displace s 30 of the Interpretation Act must ordinarily appear with the same reasonable certainty as is needed to displace the general common law rule. A contrary intention need not be express and its implication, although sometimes referred to as ‘necessary implication’, has not been confined to those extreme circumstances in which alteration of an existing right or liability ‘cannot be avoided without doing violence to the language of the enactment’. The cases, rather, demonstrate that a contrary intention will appear with the requisite degree of certainty if it appears ‘clearly’ or ‘plainly’ from the text and context of the provision in question that the provision is designed to operate in a manner which is inconsistent with the maintenance of an existing right or liability.[43]

[42](2014) 254 CLR 1.

[43]Ibid 22 [52] (citations omitted).

In Douglas v Harness Racing Victoria[44] the Court of Appeal addressed the question of whether the Racing Amendment (Integrity and Disciplinary Structures) Act 2018 conferred on the appellant an accrued right to seek review by VCAT, and if so, whether any intention expressly appeared in the Act contrary to the preservation of that right in accordance with s 14(2) ILA. The Court of Appeal stated:

Section 14(2) provides for the preservation of rights to which it applies ‘unless the contrary intention expressly appears’. In the context of comparable legislation where the word ‘expressly’ does not feature, the contrary intention must appear ‘with reasonable certainty’. That will be so if it appears ‘clearly’ or ‘plainly’ from the text and context of the provisions in question that they are intended to operate inconsistently with the preservation of the relevant right. The word ‘expressly’, which features in s 14(2), does not mean to exclude a contrary intention that appears only by necessary implication. To the contrary, ‘expressly’ means ‘plainly’, ‘clearly’, or ‘by necessary implication’.[45]

[44][2021] VSCA 128.

[45]Ibid [60] (citations omitted).

Professor Pearce opines in Interpretations Acts in Australia[46] that the more detailed the Act to be interpreted is, the more likely it is intended to be the law on a particular topic.[47] Authorities which have considered whether an Act displays a contrary intention such as to displace the operation of provisions such as s 41 ILA, support Professor Pearce’s opinion.
[46]Dennis Pearce, Interpretation Acts in Australia (2018, LexisNexis Butterworths).
[47]Ibid 12.

In Yule v Junek,[48] Mason J described the relevant provisions as ‘so comprehensive in their operation in relation to pending proceedings … as to compel the conclusion that they were intended to deal exhaustively with that topic, thereby excluding the possibility that s. 8 of the Acts Interpretation Act was to have an independent or additional application in connexion with such proceedings’.[49]
[48](1978) 139 CLR 1.
[49]Ibid 14.

In Director-General of Education v Suttling (‘Suttling’)[50] an officer of the New South Wales Teaching Service had been appointed to a temporary position for a fixed term pursuant to s 51 of the Education Commission Act 1980 (NSW) (‘ECA’). The High Court held that the ECA dealt with all aspects of temporary appointment and therefore displaced the general power under s 30(b) of the Interpretation Act 1897 (NSW) to remove or suspend a person appointed to an office. Brennan J, with whom Mason ACJ and Deane J agreed, concluded that the exercise of the power of removal conferred by s 30(b) was confined by s 23 of the Government and Related Employees Appeal Tribunal Act 1980 (NSW):

The power to fix a period of temporary appointment is not expressly conferred on the Director-General by s. 51 of the Act, but the power is none the less conferred by necessary implication: see sub-s. (3). It follows that a period of appointment fixed pursuant to that section cannot be abbreviated without cause. If the Director-General proposes to remove a temporary appointee from his position for cause before the fixed term of his appointment has expired, it would be necessary to observe any of the applicable requirements of Pt IV, Div. 6 of the Act and of Pt III, Div 2. of the GREAT Act ... The power to abolish positions in determining staff establishments and the power of removal conferred by s. 30 of the Interpretation Act are both general in nature; neither can be exercised in derogation of the rights of members of the Service created pursuant to the power to make particular appointments under s. 51. It follows that the premature termination of Mr. Suttling’s appointment is not supported by s. 30 of the Interpretation Act and that Mr. Suttling was wrongfully required to quit his position at Strathfield.[51]

[50](1987) 162 CLR 427 (‘Suttling’).

[51]Ibid 445. See also Downe v Sydney West Area Health Service (No 2) [2008] NSWSC 159, [319].

In Thomson v Minister for Education[52] Wilson J of the Queensland Supreme Court held that although specific provisions in the Public Service Management and Employment Act 1988 (Qld) (‘PSMEA’) dealt with dismissal from the public service generally, they did not cover removal from the particular office to which the applicant had been appointed. Therefore, the Minister could exercise the power of removal under ss 24AA and 25 of the Acts Interpretation Act 1954 (Qld). The case dealt with ss 7(1)(a) and 22(1) of the PSMEA, which provided respectively that ‘processes for selecting persons for appointment and appointment of persons to or within the public service’ must be based upon ‘a proper assessment of the merit of the applicants’ and that where it is ‘proposed make an appointment to fill a vacancy in an office’ there must be a notification of the vacancy in the Gazette. These provisions were not complied with in the applicant’s recruitment process, and the Minister rescinded the applicant’s appointment to the teaching service. Pursuant to s 25 of the Acts Interpretation Act 1954 (Qld) a power to appoint a person to an office included a power to remove the person from that office. Section 24AA of the Acts Interpretation Act 1954 (Qld) provided that the power to make a decision included the power to repeal that decision. The application of the Acts Interpretation Act 1954 (Qld) could be ‘displaced, wholly or partly, by a contrary intention appearing in any Act’.[53]
[52](1994) 1 Qd R 83 (‘Thomson’).
[53]Acts Interpretation Act 1954 (Qld) s 4.

Wilson J held that no contrary intention appeared to displace the Acts Interpretation Act 1954 (Qld) and that by virtue of ss 25 and 24AA of the Acts Interpretation Act 1954 (Qld) there was to be implied into the PSMEA a power exercisable by a Minister authorised to make an appointment to an office to rescind the appointment where it did not comply with ss 7(1)(a) and 22 of the PSMEA.[54] Wilson J distinguished the judgment of Brennan J in Suttling on the grounds that ‘the specific provisions in question of the Education Commission Act and the Government and Related Employees Appeal Tribunal Act were of critical importance, as were the precise terms of the appointment. Similar issues are not raised here, and in consequence Suttling can be readily distinguished’.[55] Wilson J concluded that there was no inconsistency between the power of removal conferred on the Minister for Education under s 24AA of the Acts Interpretation Act 1954 (Qld) and ss 7(1)(a) and 22(1) of the PSMEA.
[54]Thomson (n 52) 83.
[55]Ibid 91.

The basis upon which Wilson J distinguished Suttling applies equally to the present proceeding. Section 95A(1) requires a Council’s CEO to be employed under a contract. Save for the matters prescribed by s 95A(2), the LGA is otherwise silent as to the terms of the contract. The absence of detailed prescription is inconsistent with the LGA manifesting an intention that s 94 does not include a power of termination.

Armidale Regional Council v O’Connor,[56] a judgment of the New South Wales Land and Environment Court, involved similar legal and factual issues to those arising in the present proceeding.[57] One of the issues was whether the Local Government Act 1993 (NSW) (‘LGA NSW’) manifested a contrary intention to exclude provisions of the Interpretation Act 1987 (NSW) which correspond with s 41 ILA.
[56](2020) 245 LGERA 56 (‘Armidale’).
[57]Neither party made any reference to this judgment in their written or oral submissions.

Armidale Regional Council (‘ARC’) and its General Manager Ms Law (called the Chief Executive Officer) brought proceedings under ss 673 and 674 of the Local Government Act 1993 (NSW) to remedy or restrain a breach of the Act. The phrase ‘a breach of the Act’ includes ‘a threatened or apprehended contravention of or a threatened or apprehended failure to comply with’ the Act: s 672(a)(ii). The alleged threatened or apprehended breach was that ARC might deny procedural fairness to its CEO in threatening to exercise an implied statutory power to terminate her contract of employment as General Manager. A Notice of Motion had been lodged on 28 April 2020 by six Councillors calling for an extraordinary meeting of the Council to debate and vote on a motion that ARC terminate Ms Law’s contract of employment as General Manager pursuant to sub-cl 10.3.5 of the contract. ARC and Ms Law contended that, if ARC were to do so, this would deny Ms Law procedural fairness. The six Councillors were the respondents to the proceeding.

ARC contended that in order to terminate Ms Law’s employment as General Manager, the Council was required to exercise the implied power to terminate the appointment of Ms Law under s 334 of the Act. ARC’s primary contention was that the power was to be implied as a result of the proper construction of the Act, rather than pursuant to s 47(1)(b) of the Interpretation Act 1987 (NSW). Section 334(1) provides in part: ‘A council must appoint a person to be its general manager’. ARC contended:

(vii) Section 334(1) not only imposed a duty to appoint a General Manager but also conferred the power to appoint a General Manager in order to perform this duty;

(viii) The power in s 334 to appoint a person to be its General Manager impliedly conferred a power to terminate the appointment;

(ix)The exercise of the implied statutory power to terminate the appointment of a person as General Manager was conditioned upon a compliance with the rules of procedural fairness;

(x) There were no plain words of necessary intendment in s 334 of the Act or elsewhere that indicated that the implied power to terminate the appointment of a person as General Manager might be exercised other than in accordance with the rules of procedural fairness;

(xi)A failure to comply with the rules of procedural fairness in the exercise of implied power under s 334 of the Act was a failure to comply with the Act and a breach of the Act within the meaning of s 672;

(xii) There was a threatened or apprehended failure to comply with the rules of procedural fairness in three respects: apprehended bias by reason of the Councillors being in the position of an accuser, apprehended bias by reason of the pre-judgment of the Councillors, and failure to afford Ms Law an opportunity for a hearing.[58]

[58]Armidale (n 56) [6]–[11].

Sections 338(5) and (6) of the LGA NSW require a General Manager to be employed under a contract and specify the nature and terms of the contract. A General Manager is required to be employed under a standard form contract approved by the Departmental Chief Executive of the department of local government. ‘Office’ is defined to include a position.

Preston CJ rejected ARC’s contention that there was a threatened breach of the LGA NSW by reason of ARC proposing to terminate Ms Law’s employment in accordance with cl 10.3.5 of the contract. Clause 10.3.5 conferred upon a Council the right to terminate by giving 38 weeks’ written notice to the General Manager, or alternatively, by termination payment in lieu of notice under sub-cl 11.3.

Preston CJ concluded that termination of Ms Law’s employment under cl 10.3.5 was a removal of a person from the position of General Manager under the terms of the General Manager’s contract with the Council, within the meaning of s 336(2)(f) of the LGA NSW. Section 336(2)(f) provides:

A vacancy occurs in the position of general manager if the general manager—
(f) is removed from the position for breach of or under the terms of the general manager’s contract with the council.

His Honour concluded that such removal did not require the exercise of statutory power, as it was done under the terms of the contract:

The appointment of a person under s 334 to the vacant position of general manager or to act in the vacant position of general manager does require the exercise of statutory power, being s 334, but the removal of a person from the position of general manager under the terms of a general manager’s contract with a council does not require the exercise of statutory power, as it is done under the terms of the contract.
…
In the present case, the removal of Ms Law from the position of general manager would be under the terms of the general manager’s contract with the Council. It would only be necessary to invoke statutory power to remove Ms Law from the position of general manager if such removal were being sought to be done otherwise than in accordance with and under the terms of the general manager’s contract with the Council. In that circumstance, the contract could not provide the necessary authorisation for the Council’s action to remove the general manager from the position of general manager and some other source of authority in the Act would be required, but this is not the situation in the present case.
As the Council’s threatened action of terminating the contract of employment with Ms Law will be under the terms of the contract and will not involve the exercise of any statutory power under the Act, there can be no threatened or apprehended breach of the Act. The common law attaches the rules of procedural fairness only to an exercise of a statutory power under the Act, not the exercise of a right under a contract of employment. Hence, irrespective of whether or not there might be an apprehension of bias or a denial of a fair opportunity for a hearing, as alleged by the Council, there can be no breach of the Act as there is no breach of a statutory provision to which the rules of procedural fairness attach.[59]

[59]Ibid [27], [29] (emphasis added), [30].

Preston CJ accepted the respondents’ contention that once ARC entered into the contract of employment with Ms Law, ARC did not need any further statutory authority to exercise any rights under the contract. The authority to exercise rights under the contract was provided by the contract itself. One of the rights under the contract was the right to terminate the contract before the termination date.[60]
[60]Ibid [17], [21].

The respondents’ contention that the termination of Ms Law’s contract was governed solely by the contract is on all fours with WCC’s contention that the termination of Mr Schneider’s appointment as CEO was purely a contractual matter which did not give rise to any obligation on the Council’s part to afford Mr Schneider procedural fairness.[61] That submission assumes, incorrectly, that the contract conferred a right on WCC to terminate Mr Schneider’s appointment for no reason. Preston CJ concluded that if the termination of Ms Law’s appointment as General Manager had been done otherwise than in accordance with the terms of the contract, ‘the contract could not provide the necessary authorisation for the Council’s action to remove the general manager from the position of general manager and some other source of authority in the Act would be required’.[62] For reasons discussed subsequently in this judgment, cl 14.1 of Mr Schneider’s contract did not confer a right upon WCC to terminate Mr Schneider’s appointment as CEO for no reason. The termination of Mr Schneider’s appointment was not in accordance with the terms of his contract. The source of power to terminate the appointment was s 94 LGA.
[61]Transcript of Proceedings, T 129 L 18–20 (24 March 2021).
[62]Armidale (n 56) [29].

Further, there are significant differences between the legislative scheme governing the appointment and employment of a General Manager under the LGA NSW, compared with the provisions governing the appointment and employment of a CEO under the LGA. Under both the LGA NSW and the Victorian Act there is a requirement to appoint a person to be General Manager/CEO and for that individual to be employed pursuant to a contract. However, under ss 338(5) and (6) of the LGA NSW, ARC was required to employ its General Manager under the ‘Standard Contract of Employment of General Managers of Local Councils in New South Wales’.[63] Under the LGA NSW every General Manager employed by a Council in New South Wales is subject to identical provisions in respect of termination of employment. When offering employment to its General Manager on the terms which included cl 10.3.5, ARC was not exercising a broad discretionary power of the type conferred by s 95A of the LGA. Under the LGA NSW there is no room for any inconsistency between the terms of a contract offered to a General Manager and the provisions of the LGA NSW. As a result, there was no scope for Ms Law to contend, as Mr Schneider does, that the termination provisions of her contract were invalid by reason of inconsistency with the statute governing her appointment.
[63]Ibid [16].

Further, there is no provision in the LGA which corresponds with s 336(2)(f) of the LGA NSW. Section 336(2)(f) stipulates that a vacancy in the position of General Manager occurs if the General Manager is removed from the position under the terms of the General Manager’s contract with the Council. Section 336(2)(f) is a statutory acknowledgement that a General Manager may be lawfully removed from office pursuant to the termination provisions of the standard form contract which binds a General Manager and the Council.

Preston CJ’s finding that the proposed termination of the General Manager did not constitute a threatened breach of the LGA NSW was sufficient to dispose of the proceedings.[64] Although it was not necessary to do so, his Honour considered the question of whether the power of appointment under s 334 included a power to remove a General Manager pursuant to s 47(1)(b)(i) of the Interpretation Act 1987 (NSW). His Honour concluded that the power of appointment under s 334 includes a power to remove at any time a person so appointed. His Honour also concluded that the LGA NSW does not evince any contrary intention[65] that the power of appointment did not include a power of removal.[66] However, his Honour concluded that it would only be necessary to invoke the statutory power to remove Ms Law as General Manager if such removal was sought to be done otherwise than in accordance with the terms her contract with ARC.[67] Preston CJ also concluded that where it was necessary for ARC to invoke a statutory power of termination, implied by s 47 of the Interpretation Act 1987 (NSW), that power was required to be exercised in accordance with the rules of procedural fairness.[68]
[64]Ibid [31].
[65]See Interpretation Act 1987 (NSW) s 5(2).
[66]Armidale (n 56) [35].
[67]Ibid [29], [36].
[68]Ibid [38]–[39].

His Honour’s conclusion that there was no scope for the operation of an implied statutory power of removal where the termination was in accordance with the terms of the contract does not support WCC’s contention that its right to terminate Mr Schneider’s appointment was governed solely by cl 14.1 of the contract. First, as WCC did not have a contractual right to terminate Mr Schneider’s appointment for no reason, the source of power to terminate the appointment was s 94. Second, the LGA NSW prescribes a standard form contract for a General Manager, including in respect of termination. Third, s 336(2)(f) of the LGA NSW stipulates that a General Manager is removed from office if terminated under the terms of their contract. These provisions manifest a clear contrary intention that where a General Manager is terminated in accordance with the terms of their contract, there is no room for the operation of an implied statutory power of termination.

Section 41(2)(a) ILA

Section 41(2)(a) of the ILA provides:

The following paragraphs apply in relation to an appointment of a person (the appointee) made under subsection 1—
(a) the appointer—
(i)may determine the terms and conditions of the appointment, including remuneration and allowances (if any);
(ii)may terminate the appointment at any time.

The power of an appointer to ‘determine’ terms and conditions of the appointment is a power to ‘decide’ what the terms and conditions of the appointment shall be.[69] Relevantly, the Oxford English Dictionary defines ‘determined’ as ‘lay down decisively or authoritatively; to pronounce, declare, state’; ‘to settle or fix beforehand; to obtain, decree; to ordain what is to be done’.[70]
[69]See Bluebottle UK Ltd v Deputy Commissioner of Taxation (2007) 232 CLR 598, 613; City of Heidelberg v McPherson [1964] VR 783, 783, 784.
[70]Oxford English Dictionary (online at 3 June 2021) ‘determine’ (defs 6, 7).

Section 95A LGA provides that a senior officer, including a CEO may only be employed under a contract. Section 95A manifests a contrary intention to s 41(2)(a)(i) ILA such that the power of a Council to appoint a person to the office of CEO does not include a power to determine the terms and conditions of the appointment. A power to determine terms and conditions of appointment is exercised unilaterally. In contrast, the requirement under s 95A for a Council to enter into a contract with a CEO requires a consensual process necessitating the agreement of both parties.

The power of an appointer to terminate an appointment at any time under s 41(2)(a)(ii) must be read subject to s 93A(6) LGA which precludes the termination of a CEO’s appointment during an election period. The power of appointment under s 94 includes a power to terminate the appointment of a CEO at any time, other than during an election period.

Section 94(1) LGA is to be read and understood in the light of ss 41(1) and (2)(a) of the ILA. It is necessary to undertake ‘a single act of statutory construction’.[71] The statutory power of removal from office and termination of appointment of a CEO is not pursuant to ss 41(1) and (2) ILA. Rather, the statutory power is s 94(1) LGA read and understood in light of ss 41(1) and (2) ILA. When this process of construction is undertaken s 94(1) is to be construed as follows:

A Council must appoint a natural person to be its CEO and may remove the person appointed as its CEO and may terminate the appointment at any time, other than during an election period.

The statutory power of termination must be exercised in conformity with the rules of natural justice

[71]Douglas v Harness Racing Victoria [2021] VSCA 128, [24].

On 26 October 2018 WCC passed a resolution:

1.That Council, pursuant to Sections 94, 94A and 95A of the Local Government Act 1989 (‘the Act’) appoint Mr Peter Schneider to the position of Chief Executive for a 4 year term, commencing mid January 2019.
2.That, subject to written acceptance of Council’s offer of appointment, Council execute the employment agreement pursuant to Sections 94A and 95A of the Act.[72]

[72]Exhibit D-8, [1]–[2].

The execution by WCC of an employment contract was subject to Mr Schneider’s acceptance of WCC’s offer of appointment to the office of CEO. I infer that WCC acted in accordance with the resolution of 26 October 2018 and did not execute the contract until after Mr Schneider had accepted the offer of appointment as CEO. Immediately upon Mr Schneider’s acceptance of WCC’s offer of appointment, s 94(1) conferred upon WCC a power to terminate his appointment, and thereby prejudice his rights and interests. In Annetts v McCann[73] the plurality stated:

It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment. In Tanos, Dixon CJ and Webb J said that an intention on the part of the legislature to exclude the rules of natural justice was not to be assumed nor spelled out from ‘indirect references, uncertain inferences or equivocal considerations’. Nor is such an intention to be inferred from the presence in the statute of rights which are commensurate with some of the rules of natural justice. In Kioa v West, Mason J said that the law in relation to administrative decisions ‘has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention’.[74]

[73](1990) 170 CLR 596.

[74]Ibid 598 (citations omitted); see also Jarratt (n 30) 56 [24], 61 [51].

The LGA does not clearly manifest an intention to exclude the rules of natural justice in relation to the exercise of the power to terminate the appointment of a CEO. Under s 94(3) LGA a Council may only appoint a person to be its CEO after it has invited applications for the position in a notice in a newspaper circulating generally throughout Victoria and has considered all applications received by it that comply with the conditions specified in the notice. Section 94(3) is intended to ensure that an appointment as CEO is merit based. Mr Schneider’s contract expressly acknowledges that he has been appointed on the basis of merit. It would be incongruous if a person appointed as CEO following a merit based selection process could be subject to arbitrary termination for no reason and without regard to the rules of natural justice.[75]
[75]Jarratt (n 30) 83 [122].

Under s 95A(2) the contract of a CEO must specify performance criteria for the purpose of reviews of the CEO’s performance. Under s 95A(4) a contract which does not comply with this requirement is void. Under s 97A a Council must review the performance of its CEO at least once a year. The mandatory requirement for periodic performance reviews is not consistent with the power of termination under s 94(1) being exercised for no reason and without the CEO having a right to question the reason relied upon by the Council.[76]
[76]Ibid 84 [126].

Read and understood in the light of s 41(2)(a)(ii), subject to s 93A(6), s 94(1) conferred a power upon WCC to terminate Mr Schneider’s appointment ‘at any time’. These words regulate the time at which the power of termination may be exercised, not the procedure by which, or the grounds on which a decision to terminate will be made. The words ‘at any time’ do not clearly manifest a legislative intention to exclude the rules of natural justice in relation to the exercise of the power of termination.[77]
[77]Ibid 70 [86], 88–9 [139], 96 [158].

Section 3C(1) of the LGA provides:

The primary objective of a Council is to endeavour to achieve the best outcomes for the local community having regard to the long term and cumulative effects of decisions.

Section 3C(2)(g) provides:
In seeking to achieve its primary objective, a Council must have regard to the following facilitating objectives—
(g) to ensure transparency and accountability in Council decision making.

A contract could contain a power of termination which might, or might not, be exercised in a manner consistent with the requirement under s 94 to afford a CEO natural justice when terminating their appointment. The ‘any reason’ ground of termination in cl 14.1 is an example of such a provision. A CEO could be terminated pursuant to this ground in circumstances where notice is provided of the particular reason for termination and an opportunity is provided to the CEO to respond to that reason. In those circumstances there would be no inconsistency with the requirement under s 94 to afford natural justice. However, a CEO could be terminated under the ‘any reason’ ground without being accorded natural justice. The ‘any reason’ ground of termination is not invalid by reason of inconsistency with the statutory requirement that a Council must accord a CEO natural justice. However, the exercise of the contractual right to terminate for any reason must be consistent with the statutory power in s 94, which requires compliance with the rules of natural justice.

Section 93A(6)(b) expressly recognises that a decision to terminate the appointment of a Chief Executive Officer is made ‘under section 94’ (emphasis added). Notwithstanding s 95A(1) LGA requiring that a ‘senior officer may only be employed under a contract’, s 93A(6)(b) LGA manifests a statutory intention that the termination of a CEO’s appointment is intended to be effected under s 94 rather than under a CEO’s contract of employment. The definition of ‘major policy decision’ in s 93A(6) does not include reference to the termination of a CEO’s employment or appointment under their contract of employment. It would be incongruous if, during an election period, a Council were prevented from terminating the appointment of a CEO under s 94 but could nonetheless do so through the exercise of a power found in the contract of employment. Section 93A manifests a statutory intention that a decision to terminate the appointment of a CEO is to be effected under s 94 LGA.

As with the employing statutory bodies in Burns and Mabey, a Council under the LGA is a body corporate capable of entering into contracts. However, the legislative scheme of the LGA supports a finding that the termination of a CEO cannot be effected solely under a CEO’s contract of employment.

Under s 95A(2) a senior officer’s contract of employment must ‘specify performance criteria for the purpose of reviews of the senior officer’s performance’. Section 97A(1) provides ‘[a]t least once each year a Council must review the performance of the Chief Executive Officer’. As Callinan J in Jarratt v Commissioner of Police (NSW) stated:

The notion of a contract of employment, and periodic reviews of performance under it, does not, absent express statutory indication otherwise, sit comfortably with a right to end the contract summarily, and without reason, or a notice, or a right to question the reason relied upon for its termination.[101]

[101]Jarratt (n 30) 84 [126].

The statutory requirement for annual performance reviews manifests an intention that Councils cannot exercise a contractual right of termination without complying with the statutory requirement under s 94 that a CEO be provided with natural justice.

The LGA contains Pt 4 Div 4, titled ‘Complaints’, which has the purpose of ‘ensur[ing] proper oversight of processes used by a Council in dealing with a complaint about the conduct of the Chief Executive Officer’.[102] Section 104 defines ‘complaint’ as:
[102]Local Government Act 1989 (Vic) s 103.

(a)a written complaint by the complainant to the Council about the conduct of the Chief Executive Officer; or
(b)a written complaint by the complainant about the conduct of the Chief Executive Office to a person or body authorised under any Act to consider conduct of that kind; or
(c)an application to a court or tribunal by the complainant to initiate any proceedings in respect of the conduct of the Chief Executive Officer—

but does not include a written complaint that is frivolous or vexatious;

Section 104 also contains the following definition of ‘probity’:

probity means the integrity of processes used by the Council in dealing with a complaint, including processes to ensure that so far as it is reasonably practicable and within the responsibility of the Council—
(a) any relevant statutory procedures have been complied with;
(b)any order made by a court or tribunal in any proceedings relating to the complaint has been given effect to;

(c)       natural justice has been afforded;
(d)      the privacy of personal information has been protected;
(e)       confidentiality under section 77 has been maintained.

Under Pt 4 Div 4 of the LGA the CEO must, upon becoming aware of a complaint, immediately advise the Mayor and advise the Council at the next meeting of the Council.[103] After advising the Mayor about a complaint the CEO may request the Secretary to appoint a probity auditor in relation to the complaint under s 106(1). The Secretary may then appoint a probity auditor if they consider that such an appointment would assist in ensuring probity in dealing with the complaint.[104]
[103]Ibid s 105.
[104]Ibid s 107(1).

The duties and powers of a probity auditor are set out in s 108 as follows:

(1)The primary duty of a probity auditor is to assist the Council to ensure probity in dealing with the complaint and to provide a written report in accordance with section 109 when the probity audit is concluded.
(2)The probity auditor may provide the Council with advice on probity matters in dealing with the complaint if the probity auditor considers that the advice could assist the Council.
(3)The probity auditor may require a Councillor or a member of Council staff to produce a document, providing information or give reasonable assistance if the probity auditor considers that it will assist the probity auditor to perform his or her duties.
(4)If a Councillor or a member of Council staff unreasonably refuses to comply with a requirement under subsection (3), the probity auditor must report the failure to the Council, the Mayor, the Chief Executive Officer and the Secretary.

Under s 109, after the conclusion of the probity audit the probity auditor must prepare a written report:

(a)describing the processes used by the Council in dealing with the complaint;
(b)containing a summary of the activities undertaken by the probity auditor in the course of conducting the probity audit;
(c)including a statement of opinion by the probity auditor as to whether or not the Council has observed due probity in dealing with the complaint.

A copy of the report must be provided to the Council, the Mayor, the CEO and the Secretary.

The procedure contemplated in Pt 4 Div 4 of the LGA, and particularly the CEO’s ability to request the appointment of a probity officer under s 106(1) in relation to a complaint made about them, would be undermined if a Council could contract to terminate the appointment of a CEO for no reason and validly exercise that contractual power without according the CEO natural justice. Pt 4 Div 4 requires a Council to follow certain procedures in relation to a complaint against a CEO. It supports a construction of the LGA that — unlike the situation in Burns and Mabey — a decision to terminate the appointment of a CEO is not made solely under the contract of employment but is subject to and requires the exercise of power under s 94 LGA.

An important distinction between the position of a CEO under the LGA and that of the employees in Burns and Mabey, is that the CEO is entrusted with public duties, functions and powers under the LGA. Section 65 which deals with the role of a Councillor makes clear that:

(3)The role of a Councillor does not include the performance of any functions that are specified as functions of the Chief Executive Officer under section 94A.

This separation between the functions of the CEO and the role of Councillors is important given the statutory functions of the CEO. If a Council were free to summarily terminate a CEO pursuant to a contract of employment this would undermine the intention of the LGA that the CEO’s statutory functions are exercised by the CEO independently of Councillors.

The position of a CEO under the LGA is far removed from Burns and Mabey which involved employer-employee relationships. In Burns, Bowen CJ and Lockhart J acknowledged that:

Our conclusion may be different if the University Act or statutes made by the Council thereunder gave special statutory status, privilege or protection to people who held high positions or office in the appellant, but they do not do this.[105]

The LGA confers on a CEO the status of an office holder. The LGA manifests an intention that termination of a CEO’s appointment cannot be effected solely under their contract of employment. A decision to terminate the appointment of a CEO is not one which ‘derives its capacity to bind from contract or some other private law source’[106] but rather one that is subject to and made under s 94 LGA.

[105]Burns (n 93) 35.

[106]Griffith University v Tang (2005) 221 CLR 99, 128 [81].

Mr Schneider was not accorded natural justice when the Council terminated his appointment as CEO

The content of the obligation to observe the requirements of natural justice may vary according to the statutory framework governing a particular decision and the circumstances of an individual case.[107] The ‘ordinary incidents’ of natural justice/ procedural fairness ‘include the absence of the actuality or the appearance of disqualifying bias and the according of an appropriate opportunity to be heard’.[108]
[107]Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 366.
[108]Ibid 367; see also Isbester v Knox City Council (2015) 255 CLR 135, 154 [55]; Kioa v West (1985) 159 CLR 550, 584–5.

WCC accepts that it did not, prior to the making of the termination decision, accede to Mr Schneider’s request in an email dated 13 July 2020 that he be given written details of the issues which prompted the termination to be considered and that he be allowed a reasonable period to respond to those issues. WCC also accepts that the four Councillors who comprised the majority had, prior to 13 July 2020, determined to make the termination decision.[109] WCC submitted that if it was required to accord Mr Schneider natural justice it did so. It submitted that in the months prior to the meeting of 13 July 2020 Mr Schneider had been placed on notice and given an opportunity to be heard regarding concerns in respect of his work performance.[110]
[109]Defendant, ‘Defendant’s Outline of Submissions’, 8 January 2021, [10]–[11].
[110]Ibid [70].

WCC submitted that during a meeting on 21 February 2020 attended by six Councillors and Mr Schneider he was appraised of dissatisfaction with his work performance. I do not accept that by reason of his attendance at the meeting on 21 February 2020 Mr Schneider was provided with notice of the matters which underpinned the termination of his appointment as CEO on 13 July 2020. The minutes of the meeting of 21 February 2020[111] do not record Mr Schneider being told that if his work performance did not improve his employment would be terminated. Further, WCC subsequently endorsed Mr Schneider’s March 2020 performance review and resolved to increase his salary in line with the consumer price index. This conduct is inconsistent with Mr Schneider having been on notice of the imminent termination of his employment.
[111]See Exhibit MKLN-5 to the Affidavit of Michael Kein Lam Neoh, sworn 2 November 2020.

In the circumstances of the present case the principles of natural justice required WCC to:

(xv) notify Mr Schneider of the proposal to terminate his appointment as CEO and his employment as CEO;

(xvi) advise him of the specific allegations against him and the contents of any adverse report; and

(xvii) provide him with an opportunity to respond to those allegations and any criticisms of his performance as CEO.[112]

Further, the decision to terminate his appointment had to be made absent the actuality or appearance of disqualifying bias.[113]

[112]Cf Jarratt (n 30) 62 [53].

[113]Isbester v Knox City Council (2015) 255 CLR 135, 154 [55].

Mr Schneider’s appointment as CEO was terminated without any regard to procedural fairness. He was not advised in advance of the meeting on 13 July 2020 of a proposal to terminate his appointment as CEO. As set out in his email to Mr Herbert of 13 July 2020 he was left to speculate as to whether ‘the confidential matter’ was the termination of his employment.[114] Despite a specific request, he was not provided with the details of any allegation against him or any adverse report. He was not provided with an opportunity to respond to any allegations of poor performance. Further, the four Councillors who supported the resolution to terminate his employment had determined well in advance of the meeting that they intended to do so. From at least mid-June 2020 the four Councillors had decided to terminate Mr Schneider’s employment. This is evident from the email exchanges between Councillor Neoh and Maddocks between 13 and 16 June 2020.[115]
[114]Exhibit TH-7 to the Affidavit of Tony George Herbert, sworn 5 October 2020.
[115]Exhibit MKLN-4 to the Affidavit of Michael Kein Lam Neoh, sworn 2 November 2020.

In an email dated 16 June 2020 to Ross Jackson and Kate Oliver of Maddocks, Councillor Neoh stated:

It seems the Mayor and officers are trying to get us into a performance management and/or mediation scenario — but the Majority of Crs are refraining as this would be fraught with risk.
This week the CEO’s 360 was tabled but we (Crs) deferred discussing it as it had’t [sic] involved any feedback from directors or middle management but certainly the CEO tried to suggest his KPIs were being met.
As mentioned in my previous email the default is now the notice of motion path, although the CEO/Mayor will have some time to keep pushing performance the management path [sic].
The majority of Crs are resolute and just want a Special Meeting to occur.
The Notice of Motion may force the hand of the CEO to call a Special Meeting — a less public pathway.
I guess nothing has changed since the original strategy to use a notice of motion for a Special Meeting.
Whilst the other three Crs wanted to go through the Mayor, it is as I thought — he is batting for the CEO rather than simply carrying out the wishes of the Cr majority.
Thoughts?
Regards
Cr Mike Neoh.[116]

[116]Ibid.

Councillor Neoh’s statement that the ‘majority of Crs are resolute and just want a Special Meeting to occur’, records the determination of the four Councillors to terminate Mr Schneider’s appointment. The evidence supports a finding of actual bias on the part of the four Councillors.

In Minister for Immigration and Multicultural Affairs v Jia[117] Gleeson CJ set out the test of actual bias by reason of prejudgement:

The state of mind described as bias in the form of prejudgement is one so committed to a conclusion already formed as to be incapable of alteration, whatever evidence or arguments may be presented. Natural justice does not require the absence of any predisposition or inclination for or against an argument or conclusion.[118]

[117](2001) 205 CLR 507.

[118]Ibid [72]; see also Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70, 91 (Deane J), 100 (Gaudron and McHugh JJ).

The mindset of the four Councillors who voted in favour of the termination of Mr Schneider’s employment went well beyond a predisposition in favour of termination. From mid-June 2020 the four Councillors were resolute in their determination to oust Mr Schneider. This conclusion is supported by the refusal of the four Councillors on 13 July 2020 to engage in any discussion whatsoever regarding the merits of the termination resolution.

In McGovern v Ku-ring-gai Council[119] Spigelman CJ stated:

In the context of a multi-member elected decision-making body, there is no requirement that each of the decision-makers must keep an ‘open mind’ until every decision-maker is prepared to make a decision. It is perfectly legitimate for one member of such a collegial body to make up his or her mind before others do so and, in accordance with a process of democratic decision-making, to seek to persuade other decision-makers to agree with his or her conclusion, if necessary by changing their minds.[120]

[119](2008) 72 NSWLR 504.

[120]Ibid [51].

In the present case, the process of democratic decision making was seriously undermined by the approach adopted by the four Councillors. Rather than engaging with the three other Councillors to discuss their concerns about Mr Schneider’s performance, they sat mute. Not only were the four Councillors not prepared to give the question of Mr Schneider’s termination fresh consideration in light of relevant facts and arguments which might have been raised during the meeting,[121] they ensured that there was no potential for any matters favourable to Mr Schneider to be aired during the meeting.
[121]See Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507, 564 [185].

The process of democratic decision making in respect of the resolution of 13 July 2020 required a collective decision by the seven Councillors. The approach of the four Councillors in refusing to engage in any discussion regarding the merits of the termination of Mr Schneider’s employment was totally inconsistent with the proper process of democratic decision making.[122] The decision to terminate Mr Schneider’s employment was tainted by actual bias. If I am wrong in reaching this conclusion, the decision was tainted by apprehended bias. A fair minded lay observer might reasonably apprehend that the Council did not bring an impartial mind to the resolution of the question of whether Mr Schneider’s appointment and employment should be terminated.[123]
[122]Cf Isbester v Knox City Council (2015) 255 CLR 135, 155 [58] (Gageler J).
[123]Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337, 344 [6].

Where a decision is not free from actual or apprehended bias, there is no requirement for an applicant for judicial review to establish that a different decision could have been reached absent bias. A decision effected by bias necessarily involves a material breach of the rules of natural justice.[124] Further, putting to one side WCC’s bias, the Council’s failure to provide Mr Schneider with details of the specific allegations of poor performance against him and an opportunity to be heard in respect of those allegations, constituted an extreme denial of procedural fairness, which was plainly a material breach.[125]
[124]MZAPC v Minister for Immigration and Border Protection [2021] HCA 17, [33], [182].
[125]Ibid [182].

The termination of Mr Schneider’s appointment as CEO was invalid and of no legal effect as a result of WCC’s failure to afford him natural justice.[126] Nothing turns on the fact that the Council’s Resolution of 13 July 2020 refers only to the termination of Mr Schneider’s employment and makes no reference to the termination of his appointment to the office of CEO. The Resolution refers expressly to the ‘no reason’ ground of termination in cl 14.1 of the contract. Clause 14.1 applies to both the appointment and employment as CEO. The Resolution of 13 July 2020 purported to terminate Mr Schneider’s appointment as CEO. Further, as the termination of Mr Schneider’s appointment was invalid, WCC continued to be subject to the obligation under ss 94(2) and 95A that Mr Schneider be a member of council staff and be employed under a contract. It was therefore not possible for WCC to lawfully terminate Mr Schneider’s contract of employment whilst his appointment to the office of CEO remained on foot.
[126]Oakey Coal Action Alliance Inc v New Acland Coal Pty Ltd (2021) 95 ALJR 128, 137 [48]–[49]; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252, 259 [13]; Hossain v Minister for Immigration and Border Protection (2018) 264 CLR 123, 133 [24], 143 [62].

Mr Schneider’s appointment as CEO has not been validly terminated. The Council is required by s 95A to employ him under a contract of employment. WCC’s assertion of a right to terminate the contract for no reason constituted a repudiation of the contract. WCC had no contractual right to terminate Mr Schneider’s appointment and employment for no reason. At no stage has Mr Schneider accepted WCC’s repudiatory conduct as bringing the contract to an end. His claim for relief does not include any claim for damages. WCC terminated the employment relationship with Mr Schneider in the sense that he was required to vacate WCC’s premises and has been precluded from performing any of the duties of CEO. However, at all times since 13 July 2020 he has remained ready, willing and able to perform his contractual obligations.[127] Mr Schneider’s contract with WCC remains on foot.[128]
[127]See Exhibit PS-16 to the Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, letter dated 21 July 2020 from Haydn Robinson to WCC; Exhibit PS-18 to the Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, letter dated 1 September 2020 from Holding Redlich to WCC.
[128]Byrne v Australian Airlines Ltd (1995) 185 CLR 410, 427; Macksville and District Hospital v Mayze (1987) 10 NSWLR 708, 730.

Although the decision of WCC to terminate Mr Schneider’s appointment and employment as CEO was invalid and of no legal effect, the remedy of certiorari is available to quash the decision. The function of an order in the nature of certiorari is not confined to removing the legal consequences of an exercise of legal power. Certiorari is also available to remove the purported legal consequences of a purported exercise of power which has an ‘apparent legal effect’.[129]
[129]Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480, 492 [25]; Hot Holdings Pty Ltd v Creasy (1996) 185 CLR 149, 150.

Discretion to refuse relief

WCC submits that if the decision to terminate Mr Schneider’s appointment was affected by a denial of natural justice the Court should nevertheless refrain from exercising the discretion to grant relief. The grant of relief under Order 56 of the Supreme Court (General Civil Procedure) Rules 2015 in the nature of certiorari is discretionary.[130] WCC submits that relief in the nature of certiorari should not be granted because of the availability of damages, which it submits is a more convenient and satisfactory remedy.[131] I do not accept this submission. Mr Schneider has not made any claim for damages. Since 13 July 2020 he has contended that the contract remains on foot. Mr Schneider has not accepted the Council’s repudiatory conduct as bringing the contract to an end, thereby enlivening an entitlement to claim damages for breach of contract. Further, as the decision to terminate Mr Schneider’s appointment was invalid and of no legal effect he is entitled to resume both the office of CEO and his employment. Following the purported termination of his appointment, Mr Schneider was paid an amount equivalent to 12 months’ remuneration. He is entitled to commence receiving salary from 13 July 2021.
[130]See Victorian Legal Aid v County Court of Victoria (2004) 9 VR 686, 691 [9].
[131]Transcript of Proceedings, T 227 L 1–9, T 231 L 8–11 (25 March 2021).

It is neither necessary nor appropriate to make an order remitting to WCC for fresh consideration the question of whether Mr Schneider’s employment should be terminated. The present proceeding does not involve a decision making body which is subject to a duty to make a decision with respect to a person’s rights and which proceeds to make an invalid decision of no legal effect, with the result that the duty to make a decision remains unperformed.[132] In such circumstances an order remitting a matter for rehearing is necessary to facilitate the decision maker performing its duty. WCC, on the other hand, was not subject to any duty to convene a meeting on 13 July 2020 to consider the termination of Mr Schneider’s appointment. It is therefore unnecessary to make an order remitting to the Council for reconsideration the question of whether Mr Schneider’s appointment should be terminated.
[132]Cf Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597, 616.

I uphold Mr Schneider’s claim for a declaration that WCC breached the rules of natural justice in purporting to terminate his appointment as CEO. There is utility in granting a declaration in these terms. Mr Schneider’s professional reputation has been damaged as a result of the circumstances in which his appointment and employment were terminated. When WCC purported to terminate Mr Schneider’s appointment and employment his contract still had approximately two and a half years to run. Although the WCC resolution of 13 July 2020 relied on the ‘no reason’ ground of termination in cl 14.1, in the immediate aftermath of the decision, Councillor Neoh made well-publicised statements critical of Mr Schneider’s performance.[133]
[133]Affidavit of Peter Bernard Schneider, affirmed 15 September 2020, [28], [30].

Mr Schneider was placed in the invidious position of being terminated for no reason and then being subject to public criticism of his performance as justification for the termination decision. There is an air of unreality in respect of any suggestion that his professional reputation has not been damaged by the purported termination of his appointment and employment. The declaration will provide vindication to Mr Schneider and will provide redress for damage to his reputation flowing from the purported termination of his appointment and employment.[134]
[134]Cf Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, 582, 597.

Conclusion

The Court will make orders in the following terms:

1.The Court declares that the decision of the defendant on 13 July 2020 purporting to terminate the plaintiff’s appointment and employment as Chief Executive Officer is invalid.
2.The Court declares that the decision of the defendant on 13 July 2020 purporting to terminate the plaintiff’s appointment and employment as Chief Executive Officer was made in breach of the rules of natural justice.
3. The decision of the defendant on 13 July 2020 purporting to terminate the appointment and employment of the plaintiff as Chief Executive Officer is quashed.

I shall provide the parties with an opportunity to make submissions in respect of the costs of the proceeding.

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[2021] VSC 337

11 June 2021